HR Compliance Checklist: 14 Key Considerations in 2025

HR compliance is a cornerstone for smooth operations and the safeguarding of a company’s most valuable asset — its people. As companies grow and even cross borders, keeping up with the ever-shifting HR rules might feel overwhelming.

To master compliance, it’s essential to understand HR rules inside out. This knowledge helps you not only avoid legal troubles but also foster a friendly, cohesive work environment.

What Is Compliance in HR?

HR compliance is all about following guidelines that resonate with both legal standards and the company’s mission to nurture its workforce.

Imagine compliance as a playbook. It outlines what’s best for your team members and the company, all while ensuring you’re in line with local, state, and federal rules — rules that change based on where your business and employees are located.

Employment laws and regulations change with time as well, and this ongoing evolution means that HR departments, regardless of their size, are continually facing new challenges.

To avoid the financial and legal consequences of non-compliance, HR teams need to make an ongoing commitment to creating a safe and harmonious workplace while navigating the complexities of legal mandates. It’s about being informed, prepared, and proactive in ensuring that your compliance strategies grow and change with your business.

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What Are the Consequences of Non-Compliance?

HR compliance checklists are simple tools to help HR leaders ensure that they don’t miss a single step toward compliance. Here are some of the consequences of failing to comply:

Financial Penalties

Companies that fail to meet state compliance requirements can be subject to financial penalties. For instance, failure to withhold and remit appropriate payroll taxes on employee salaries and wages can lead to fines from the IRS and other state tax authorities.

Legal Consequences

Non-compliance can lead to other legal issues than fines. For example, an employee can file a lawsuit seeking redress for unpaid wages or benefits. At the same time, government agencies can revoke your business license if you fail to comply with regulations.

Damage to Public Image

Finally, non-compliance can damage a company’s reputation and public image, first with employees and later with clients.

What Items Should You Consider for an HR Compliance Checklist?

With all its intricacies, human resource management demands a holistic approach to ensure companies remain compliant at every step of the employee lifecycle. An HR compliance checklist serves as a compass guiding businesses through the maze of regulations, ensuring they don’t miss out on essential aspects.

Here are a few key components every checklist should have:

1. Payroll and Tax Compliance

Compliance with payroll laws and regulations means ensuring that employee records are correct and up-to-date, the proper amount for tax withdrawals is calculated, withdrawn, and remitted, and payroll processing is thoroughly documented.

Verification of Employee Information

Ensure that employees’ tax IDs, Social Security numbers, and addresses are entered correctly into your payroll system. This information is used later to fill and file W-2 and 1099 forms, so ensure you comply with standard procedures for reporting employee income and tax withholding.

Year-End Tax Documents

There are two main documents you should monitor in the New Year:

W2 Form: The W-2 form summarizes a full-time employee’s earnings and the amount deducted for tax, Medicare, and Social Security. An employer must issue the W-2 to all regular employees on Jan. 31.
1099 Form: The 1099 form is used for independent contractors or freelancers who earned $600 or more in the previous calendar year. Employers are not required to withhold earnings for taxes — however, they must provide the 1099 form to contractors, freelancers, and other non-regular employees by Jan. 31 for tax filing.

2. Benefits Compliance

Employee benefits, whether health insurance, retirement plans, or other perks, must be dispensed in accordance with applicable laws. The Affordable Care Act (ACA), for instance, sets mandates for businesses regarding health insurance.

Open Enrollment Period

Open enrollment is the window in which employees can enroll in benefits — it’s also your chance to get your benefits program right.

Here’s what the enrollment process should look like:

Monitor Legal Changes: Before open enrollment commences, review any relevant updates to employment law to ensure you provide your workers with everything they’re entitled to.
Set Up Open Enrollment for 2025: This will give your employees the opportunity to review their benefits and ensure they can access the best options available through federal and state benefit programs.
Communicate: Let your employees know about new coverage, changes to existing coverage, and eligibility requirements.
Assist: Assign qualified HR professionals to help employees evaluate their options and make informed decisions.

3. Recruiting Practices

In the early stages of employee interaction, recruiting sets the tone for your relationship with your workforce. Ensuring fair and compliant talent acquisition is vital. This means maintaining transparency in job postings, ensuring there’s no implicit bias, and upholding Equal Employment Opportunity laws.

Let’s break it down:

Ensure Fair Hiring Practices: Reevaluate your recruitment practices to ensure compliance. For example, inappropriate interview questions or questions unrelated to the business should be identified and removed. Additionally, provide as much detail in your job descriptions as you can — and as the law requires.
Form I-9: Ensure that employees are authorized to work in the U.S. and/or the state you operate in. Internal compliance audits should be conducted in alignment with those conducted by U.S. Immigration and Customs Enforcement.
Background Checks: Ensure that background checks are carried out only to the extent required by state and federal law. For example, not all companies are required to run driver’s license background checks, and subjecting certain employees to additional or unnecessary reviews could be misconstrued as discriminatory.
Recordkeeping: Maintain compliance with policies surrounding documentation and recordkeeping of recruitment and hiring procedures.

4. Onboarding Procedures

A new hire’s introduction to the company, the onboarding process is a blend of cultural initiation and procedural formalities. This is the phase where you set the expectations and establish the foundation for the employee’s journey ahead.

Ensuring that all required documents are collected, background checks are done within legal limits, and that the employee is made aware of all company policies are a few HR compliance issues to consider in onboarding.

5. Contracts

Employee contracts aren’t just legal formalities — they’re the backbone of the employer-employee relationship. Ensure these contracts are clear and follow local, state, and federal laws. This includes specifying terms of employment, compensation, benefits, non-compete clauses, and terms of termination.

6. Workplace Safety

Employee rights include a safe workplace. This encompasses both the physical environment and the organizational culture.

It is vital for businesses to adhere to safety standards set by agencies such as the Occupational Safety and Health Administration (OSHA).

You should also conduct regular safety audits, training, and drills to ensure preparedness and awareness. What’s more, you should promptly address any hazards or concerns raised by employees to maintain a secure working atmosphere.

7. Labor Notices and Posters

Employees need to know about the laws that protect them. Federal and state labor laws often require employers to display specific labor law posters informing employees of their rights and the employer’s responsibilities.

These posters should be easily seen in common areas like break rooms. It’s also crucial to keep them updated.

8. Workers Compensation Insurance

Accidents happen, even in the safest workplaces. Workers’ compensation insurance is designed to protect both employees and employers in the event of a work-related injury or illness.

Ensuring that your business carries the required level of workers’ compensation insurance in compliance with state regulations not only shields you from potential lawsuits but also shows your commitment to the welfare of your employees.

9. Equal Pay Compliance

Equal pay for equal work is a principle that businesses must staunchly uphold. The Equal Pay Act and other related regulations require that everyone in the workplace be given equal pay for equal work.

This entails that all payment types, overtime pay, including salary, bonuses, and other compensation, are dispensed fairly, regardless of gender or other protected categories. Regular audits of compensation structures can help ensure you address any disparities.

10. Paid Sick Leave Compliance

As the modern workplace evolves, the emphasis on employee well-being has never been greater. Many states and local jurisdictions have laws requiring employers to provide paid sick leave.

Familiarizing yourself with these mandates and ensuring that company policies align with them is one way to take care of your employees. Businesses should ensure that the process to access these leaves is transparent and accessible for employees.

11. Harassment Prevention

Every employee has the right to a workplace free from harassment and discrimination. Implementing a strong anti-harassment policy, conducting regular training sessions, and having a transparent reporting process are all essential to a workplace where employees feel protected.

Responding swiftly and judiciously to any reports of harassment is not just a legal requirement but also a cornerstone of an inclusive workplace culture.

12. Confidentiality Agreements

In our data-driven age, all businesses need to commit to protecting sensitive information. Confidentiality agreements safeguard a company’s proprietary information, trade secrets, and employee data.

Ensuring that employees understand and acknowledge these agreements protects your business and delineates clear boundaries for staff.

13. Applicable Regulations

Every industry, region, and business size may come with its own set of regulatory requirements. Whether it’s industry-specific certifications or regional labor laws, being aware of all regulations that apply to your business is critical.

Regular updates from compliance tools like Mosey can help businesses stay proactive and agile in the face of regulatory changes.

14. Employee Handbooks

A well-maintained employee handbook can go a long way, not only in communicating to workers what they can expect but standardizing for yourself what you offer. From pay procedures and healthcare options to anti-discrimination and harassment policies, your employee handbook should cover everything.

If you’ve never made a handbook before or are having trouble maintaining the one you’ve got, don’t worry. Employee Handbooks by Mosey make it easier than ever to manage a multi-state employee handbook. Automatically refresh your policies with one-click updates and streamline communication with employees with our user-friendly portal.

Try Mosey for HR Compliance

An HR compliance checklist ensures that your organization complies with changing HR rules, and Mosey provides a tailored compliance solution to businesses at every stage of the journey.

Mosey centralizes and streamlines your HR, payroll, tax, and entity compliance requirements, helping you automate tasks, track legislation changes, and meet compliance deadlines.

Elevate your HR compliance strategy with Mosey and experience a simplified yet authoritative approach to managing your compliance needs. Book a demo with Mosey to get started.

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